Building affordable housing(urbankchoze.blogspot.com) |
Building affordable housing(urbankchoze.blogspot.com) |
> But what about the existing starter homes built after WWII, aren't they still affordable?
> Well, no. The big problem of a starter home is that it's only cheap when it is first built, because it is barebone. Once the owners start making the house theirs to accommodate the growing needs of the family, the house gets bigger and more luxurious. Every addition to the house results in higher market value because of increased desirability. So once the original owners are ready to move out, the house is no longer a starter home, but a big, well-furnished home from which the owner will expect to recover the costs of remodeling.
> That is the issue of the "starter home" or "grow home" idea. That home is only affordable once, for its first owners. So for every generation to get its "starter home", every generation has to build entirely new neighborhoods in greenfield areas, where land is cheap. When a metropolitan area matures, this ideal no longer works, the greenfield areas are just too far and are disconnected from the city. So, what can be done?
Not only is it expensive to buy a home, you can't even buy one cheap that somebody else got for cheap because they've (likely) made it more valuable by making it more liveable for themselves!
Perhaps the lesson here is that if we want affordable housing, we need better forms of high-volume transportation that can move people rapidly between city centers and distant under-developed outskirts.
The first thing I did when I bought my home was fix the "problem" that made it sit on the market so long and sell for a discount.
(Fortunately, it was a landscaping problem that was easy for me to fix, but harder for other buyers to fix.)
Now I expect to, at a minimum, make my investment back if I sell the home.
When Florida was abuilding like crazy after WWII for the next 25 years, the lot was usually about 10%.
Also, I judge the lot value by how much it would sell for without the house. The price for empty (fill-in) lots is ridiculous. I'm all for the market setting prices, but this isn't that. This is Federal interference and local building lobbying.
People are going to spend 35-50% of their incomes on housing.
It doesn't for all sort of reasons.
Basic functional blocks like bathrooms and kitchens can only be made so small. And once one graduates from college, shared spaces seem a lot less attractive.
Housing is a basic necessity and we need to get the rampant speculation and financialization out - we're all stuck in this game of musical houses waiting for the music to stop.
Mortgage interest deduction being eliminated for owner-occupied housing I would support a transition to. Loan interest for business expenses [to include a loan secured by property, aka a "mortgage"] should continue to be a valid business deduction, meaning that renters would live in buildings that had tax deductible mortgage interest while owner-occupants wouldn't. If you're trying to pull the tax support for house prices, this won't entirely do it. I strongly oppose taking away business loan interest deductions as that harms a LOT of businesses.
I don't see anything wrong with ARMs. Most of Europe has ARMs as the standard/normal mortgage product. Interest-only, NINJA/liar loans, ARMs with introductory discounted rates are more problematic, but there's nothing wrong with a mortgage being adjustable, IMO.
Having acquired land and being accustomed to living in ~600sqft all my adult life I thought I could build a reasonable living space for about $50,000. Once I started looking into it I ran into:
- land clearing / prep ~$10,000
- utility hookups and equipment ~$15,000
- impact fees & permitting ~$5,000
- foundation ~$5,000
The game has changed for most big cities since post wwii mass housing. Jobs are more focussed in fewer places and cities are much larger so getting into the city can be very hard from outer suburbs.
The UK is a good example for thr models discussed. It has been building small houses for a long time (like 150sqm lots) and have a minimum density requirement across the country to make this happen (which is also about retaining farmland in the longer term). Too many too far from jobs though its exacerbating englands divide between haves (in london and some other places - large and small) and have nots (in towns and accretions to towns with more people than jobs)
Suppose you begin with a large lump of money sufficient to buy at least several square miles of rural land and to pay for some basic infrastructure (roads, power lines, sewer, etc..).
At first, you practically give plots of land away to anyone willing to build a house. (Since it's rural, there's little reason to be there unless there's some critical mass of people already there.) Then, as people start moving in, you can raise the price of the lots to recover some of your initial investment and pay for additional infrastructure. Eventually, you should be able to sell lots at far more than the original land cost and recover your investment. This might also spare residents from having to pay taxes until the city is fully grown and there are no more lots to sell.
Some thoughts:
The new city should ideally be near at least some neighboring town with schools, stores, a hospital, and so on to make bootstrapping easier.
This would be an easier sell both to county government and prospective citizens if it were managed by a non-profit institution that is contractually obligated to re-invest profits back into the city. This could be similar to a normal city government, except that in this case the city starts off by owning all the buildable lots.
Partnering with a University that wants to build a new campus on cheap land would be ideal.
Figuring out the right amount of land to buy up-front would be difficult. Too much and it's too expensive and you never sell it all, too little and you'll end up having to buy more adjacent land later at steeply inflated prices or let some other developer buy it and let them absorb all the profits without re-investing it back into the city.
The developer can have them here instantly and wants to build on a plot near Cesar Chavez and rent to the city. The city's not interested because the buildings are not built here and they'd be a little more expensive than existing SRO's.
http://sf.curbed.com/2016/10/31/13481254/micropad-tour-patri...
Fixing the problem is almost entirely about regulatory / legal issues.
I agree it's quite broken. But I still love their house design and concept.
The way to affordable housing is high density, mid-to-high rise condos.
How though? Density sounds good on paper, and has tons of side benefits, but (as the blog post explains) the cost of land + construction jumps significantly.
I know here in the US, there basically is no such thing as "affordable high density condos". High density urban housing is expensive, by definition. So much so that there isn't a single unsubsidized affordable high-density urban housing unit in my entire state.
The only place I'm aware of that has affordable urban housing is Japan. And that's mainly due to a combination of having no meaningful population growth, and having excellent public transit literally everywhere. Two things the US simply can't have in our lifetime
Description:
- 40ft x 9″6″ High Used reefer container.
- Bathroom with shower.
- Kitchenette.
- Electricity.
- Two large glass sliding doors.
- Security Bars on Doors.
- Painted
Link: https://containerhomes.net/products_prices/reefer-home-12900...
Video walk through: https://www.youtube.com/watch?v=xeM1ed7Wrl0
Elio motors designed an enclosed motorcycle for ~$7300.
Assuming a design like an enclosed TukTuk moped [1], a mini motor home would actually change the world overnight.
[1] http://www.designboom.com/design/cornelius-comanns-bufalino/
2. Can they be mass produced? You should start a business if so.
Yes, high rises make housing cheaper, but that comes at a price: Hearing what the neighbors around you are doing and often even saying (or their TVs/music/...!) at all times, not having some "green space" or yard of your own (and in most cases not even a shared green space), having to come to terms with all co-owners when you want to change something outside your flat. Etc.
For the price you (don't) pay, the European model sucks. (Disclaimer: I'm European... :-))
ADDED: The cost of housing in rural Nevada isn't what people are complaining about when they talk about the high price of housing.
Per person? I don't see how. For a 16-floor building, you can easily fit 120 comfortable condos on a plot of land that would otherwise only fit 2-4 single family homes. Yes, the building cost would definitely be higher, but not per household. On top of that, it would be made of steel and concrete, and not plywood, which generally rots and needs to be torn down every 50 years or so.
> High density urban housing is expensive, by definition.
By definition? I'm not sure about that. There must be some middle ground between glitzy new condo projects and "the projects", which were also high-rise and affordable.
Much of Eastern Europe, lots of Western Europe, former USSR, etc., all have relatively affordable housing.
Here is a source for construction costs for major metropolitan areas in Canada: https://t.co/18FwgkSlWY
And here are some figures.
For Toronto:
House (medium quality): 120-240$/sf
Walk-up low-rise apartment (medium quality): 100-150$/sf
Residential condos (medium quality): 180-240$/sf
Point towers, 40-80 stories (medium quality): 230-310$/sf
For Vancouver
House (medium quality): 165-225$/sf
Walk-up low-rise apartment (medium quality): 155-180$/sf
Residential condos (medium quality): 205-250$/sf
Point towers, 40-80 stories (medium quality): 270-355$/sf
For Montréal
House (medium quality): 125-180$/sf
Walk-up low-rise apartment (medium quality): 100-155$/sf
Residential condos (medium quality): 150-180$/sf
Point towers, 40-80 stories (medium quality): 250-355$/sf
So if you can afford a 400 000$ housing unit, and you assume half of it goes to pay for the land, you could get a house with about 1 500 square feet of space, a similar sized condo in a low-rise, a 1 000 square foot condo in a concrete mid-rise or a 650 square foot condo in an high-rise.
Yes, high-density housing options lower the amount of land per unit, but at the same time, zoning for higher density tends to rise the cost of land. A lot zoned for an high-rise building will be worth many times what a lot zoned for single-family houses is worth even if the two lots are adjacent, since the land value is proportional to the potential revenue of development, so the bigger the development, the higher the potential revenue, the higher the land value.
Why would half of your cost be for land in a high-rise condo? If understand your link correctly, these numbers are construction costs only. My argument always was that value of land is what makes SFHs expensive, not their construction cost.
> A lot zoned for an high-rise building will be worth many times what a lot zoned for single-family houses is worth even if the two lots are adjacent
If a developer buys a plot of land and rezones it for high-rise, they maybe gaining some value from the mere fact of rezoning, sure.
But as a consumer, say in Toronto, if I'm looking for housing right now (and I actually took a brief look at Toronto RE market in the past), available SFHs are as a rule significantly more expensive than condos, especially in the same neighborhoods.
In addition, if you're looking for something not older than 20-30 years, many SFHs force additional extra space on you (an extra bedroom or two) even if you don't need it -- it's very difficult to find a newish SFH with only 2 bedrooms for example.
So yes, in many cases, I'm forced into an apples-to-oranges comparison of a 3-4 bedroom SFH and a 2 bedroom condo, but as a consumer these are the only choices at times.
It really is, in every market I've looked at. /u/kchoze goes into this for Canada, but I'll add numbers for my own area in the Midwest US
-- Suburban House (Poor, Damaged) : ~$80/sqft
-- Suburban House (Average Quality) : ~$100/sqft
-- Suburban House (New Construction) : ~$130+/sqft
-- Suburban Townhouse (New Construction) : ~$130+/sqft
-- Semi-Urban (Gentrifying) Townhouse (New Construction) : ~$170/sqft
-- Urban Condo (Average Quality) : ~$180-$230/sqft
-- Urban Condo (New Construction, Low-Rise) : ~$280+/sqft
-- Urban Condo (New Construction, High-Rise) : ~$290-340+/sqft
It's not uncommon to be able to afford a brand new suburban sprawl home here, but no livable permanent housing in the dense urban area, regardless of age.
> By definition? I'm not sure about that. There must be some middle ground between glitzy new condo projects and "the projects"
I want that to be true, but I've never seen a single instance of this in the real world, and I'm drowning in thousands and thousands of examples where this is not true.
Can you point to any real-world examples in the US?
> "the projects", which were also high-rise and affordable.
They were directly heavily subsidized. No one is arguing that government subsidization doesn't reduce those particular residents cost. But the article assumes governments won't be willing to subsidize housing for middle-class residents.
Affordable housing requires affordable land. Big cities almost by definition do not have affordable land, therefore the housing will never be affordable in the way the author is asserting.
>Affordable housing requires affordable land. Big cities almost by definition do not have affordable land, therefore the housing will never be affordable in the way the author is asserting.
I agree. My assumption was that, given this context, he was talking about the outlying areas of cities people were interested in. Of course, otherwise, land prices are not the issue and housing construction prices aren't really the issue either.
They include land. All of those are full, retail, sticker prices as seen on Realtor.com / Redfin.com / Zillow.com
> My experience is that if there's a single family home sitting next to a tower of condos, the cost of single family home will always be higher than the cost of a single condo of similar quality in the tower,
My experience is the exact opposite.
On Redfin, right now as I happen to be writing this comment, I see a building full of luxury condos ($300k and up for 2bed) next to an 1898 SFH that needs a total reno ($114k for 4 beds). I see a bunch of brand new townhouses ($420k - 3bed) next to a teardown SFH ($170k, 4beds).
Seriously -- check this screenshot, you can see what I'm seeing - http://imgur.com/w0BIPiP . The high-density units are always 2x to 3x the price of a "sprawly" low-density single family home, despite being right next to each other.
And again, that's Redfin.com, so those are 100% all-inclusive full prices (including land, for the SFH).
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Fundamentally, I know we need to be more respectful of our land use, and build denser housing. It's good for tax revenue, it's good for public transit, it saves slightly on infrastructure costs, etc. I'm aware of (and agree with) all of those benefits.
But, economically-speaking, high-density is terrible for residents. It immediately doubles or triples housing costs, at a time when most people can barely afford their existing housing in the first place.
I don't understand how anyone can believe dense housing will be a solution to affordability, when it's so obviously un-affordable in every situation it's currently practiced today.
Here are few examples from my experience:
Atlanta, Midtown neighborhood. This area has both high-rises and SFHs. Look at this link, and you generally find that comparable quality SFHs run over $1M vs. $250-$700K for new condos: https://www.redfin.com/city/30756/GA/Atlanta/filter/sort=lo-...
Seattle, Queen Anne and Belltown. Also a mix of condos and SFHs. SFHs are significantly more expensive: https://www.redfin.com/city/16163/WA/Seattle/filter/sort=lo-...
North Miami Beach. There are no SFHs available on the beach, so condos already sit on more desirable land. However, SFHs further inland with no easy access to the beach are still more expensive: https://www.redfin.com/city/11467/FL/Miami-Beach/filter/sort...
North York, Toronto. This also has a mix of condos and SFHs in the same area. SFHs generally run 2-3 times more expensive: http://www.remax.ca/find-real-estate/#minPrice=10000&propert...